Snapdeal and Flipkart Merger Called Off, Snapdeal can Lay off 80% Employees

There is no unbox Zindagi for Snapdeal promoters and employees. In a new turn of events for Snapdeal and Flipkart, the merger talks and process is now over.

Kunal Behl the founder of Snapdeal has sent an email to employees stating that they will not be merging with the rival company but will continue to remain an independent identity.

Snapdeal and Flipkart Merger

We also wrote about the service aspect of Snapdeal, Flipkart and Amazon and which company will do better long time back.

The email also said that with the sale of Freecharge the company is now in better financial health and they are looking to create Snapdeal 2.0 which will be more lean and productive.

As per ET, there is a report that Snapdeal can lay off more number of employees and is expected to operate with just 200 people on board against a strength of 1200 employees currently.

At one point of time, Snapdeal had close to 9000 employees which have now shrunk to 1200 and going by the words of some of the top executives at Snapdeal it is going to be even less to keep the firm running profitably.

Snapdeal seems to be shrinking its operation and portfolio, there are no new exclusive mobile launches for the brand in the past few months and they drew the curtains on affiliate programs a while back.

Softbank the largest investor of Snapdeal wanted the merger to happen and that could have helped them gain some stake in Flipkart as well. But now it is expected that the Japanese tech giant will have to invest directly in Flipkart.

Also, Snapdeal recently sold off Free Charge to Axis bank for a sum of Rs. 385 crores which will help them manage their operations and help with the cash flow in the short term.

But e-commerce market is very competitive with Amazon and Flipkart being able to raise more funds, it is going to be a difficult survival for Snapdeal.

While they spend more than Rs. 200 Crore on rebranding and changing the Logo from earlier design to unbox Zindagi.

I believe that was a ridiculous exercise they did for rebranding and spend on advertisements. They should have focused on solving customer issues and improving the service with the ill spent money.

Snapdeal also stopped the easy returns for customers and things became very difficult if you are a buyer caught in a return situation.

Such mistakes are costly when you are a start-up battling the heavily funded opponents. There is also an internal rift between the investors now as early investor Vani Kola who has 8% stake in the firm wanted them to take the Flipkart deal and that would have been better for investors and employees according to her.

Definitely, Snapdeal employees have faced a lot for the last 2 years with great uncertainty and a sword hanging on the head for getting axed from the job. And the situation is likely to remain same with the merger being called off. 

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